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EIS/ SEIC/ VCT Investor

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Share subscriptions in eligible EIS, SEIS, and VCT enterprises are eligible for tax relief. This can lead to large tax savings if the timing and quantity of the investment have been carefully managed.

The tax reliefs applicable to these investments are summarised as follows:

Enterprise Investment Scheme (EIS)
  • There is a flat rate of 30% available for income tax relief.
  • A tax year's maximum investment that qualifies for EIS income tax benefit is £1 million
  • An EIS subscription may be carried back to the prior tax year.
  • If the investor sells his SEIS shares within three years of the issue, the income tax benefit would be withdrawn.
  • If certain conditions are met at the time of disposal, any gain on the sale of EIS shares is excluded from CGT.
  • Any loss on the sale of EIS shares is acceptable for capital gains taxes.
  • Reinvestment relief is also available if a person sells an asset and uses the proceeds to buy eligible EIS shares.
Seed Enterprise Investment Scheme (SEIS)
  • 50% flat-rate income tax relief is provided
  • A tax year's maximum investment that qualifies for SEIS income tax benefit is £100,000
  • A SEIS subscription can be carried back to the prior tax year.
  • If the investor sells his SEIS shares within three years after purchase, the income tax benefit will be lost.
  • If certain requirements are met at the time of disposal, any gain on the sale of SEIS shares is excluded from CGT.
  • Any loss on the sale of SEIS shares is acceptable for capital gains taxes.
  • Reinvestment relief is also available if a person sells an asset and uses the proceeds to buy eligible EIS shares.
Venture Capital Trust (VCT)
  • There is a flat rate of 30% available for income tax relief.
  • A tax year's maximum investment that qualifies for VCT income tax reduction is £200,000
  • When compared to EIS and SEIS, there is no carryback.
  • Tax-free dividends are paid on the first £200,000 invested in VCT shares.
  • If the investor sells his shares in the VCT within five years after issuance, the income tax benefit will be withdrawn.
  • Any gain is exempt from CGT if the shares are sold for a profit.
  • Losses accrued on the sale of VCT shares are not admissible for capital gains tax.
How Eureka Accountants Help You?

We offer the following services:

  • Considering your tax situation, how much money should you invest in the eligible shares mentioned above?
  • When should you purchase these shares?
  • If you should carry back your investment to the prior year or request relief in the current year
  • Estimation of the investment's potential income tax reduction

Please get in touch with us if you need any assistance or suggestions regarding your rented properties.

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